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This page features the full text ofBatas Pambansa Bilang 63AN
ACT AMENDING FURTHER REPUBLIC ACT NUMBERED FORTY HUNDRED AND
NINETY-THREE,
AS AMENDED, OTHERWISE KNOWN AS THE "PRIVATE DEVELOPMENT BANKS' ACT"

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robles
virtual law library

BATAS
PAMBANSA BILANG 63

AN
ACT AMENDING FURTHER REPUBLIC ACT NUMBERED FORTY HUNDRED AND
NINETY-THREE,
AS AMENDED, OTHERWISE KNOWN AS THE "PRIVATE DEVELOPMENT BANKS' ACT"

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robles
virtual law librarychan
robles virtual law library

Section
1. Section 3 of Republic
Act numbered Forty hundred and ninety-three, as amended, is hereby
further
amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
3. A private development
bank shall exercise all the powers and shall assume all the obligations
of a savings and mortgage bank as provided in the General Banking Act,
except as otherwise bank shall be operated without a certificate of
authority
from the Monetary Board of the Central Bank which shall be issued upon
compliance with the provisions of this law.

"Nothing
in this section shall be construed as precluding a private development
bank from engaging, with prior approval of the Monetary Board, in
commercial
banking services or from operating under an expanded commercial banking
authority, as provided under Section 21-B of Republic Act No. 337, as
amended,
nor from exercising, whenever applicable and not inconsistent with the
provisions of this Act and Central Bank regulations, such other powers
incident to a corporation." chanrobles virtual law library

Sec.
2. Section 4 of the same
Act, as amended, is hereby further amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
4. A privatedevelopment
bank shall be organized in the form of a stock corporation and its
paid-up
capital shall not be less than four million pesos for Class A, two
million
pesos for Class B, and one million pesos for Class C: Provided, That at
least seventy percent of the voting stock subscribed by the private
sector
shall be owned and held by the citizens of the Philippines, except
where
a new bank is established as a result of the consolidation of existing
private development banks in any of which there are foreign-owned
voting
stocks at the time of consolidation: Provided, however, That the
Monetary
Board may, with the approval of the President of the Philippines,
reduce
the required minimum percentage of Philippine ownership prescribed
herein
from seventy percent (70%) to sixty percent (60%): Provided, further,
That
if said subscription of private shareholders to the initial
capitalization
of a private development bank cannot be secured or is not available,
the
Development Bank of the Philippines on representation of the said
private
shareholders and with the approval of its Board of Governors shall,
within
thirty days from date of approval by the Board of Governors, and after
compliance by the private stockholders with the conditions of said
approval,
subscribe to the capital stock of such development bank, which shall be
paid in full at the time of subscription out of the trust fund provided
in Section three, paragraph three, of Republic Act Numbered Twenty
hundred
and eighty-one, in an amount equal to the difference between the
required
paid-up capital and the fully paid subscribed capital of the private
stockholders
but not exceeding the latter: Provided, furthermore, That the Board of
Governors shall act on the representation made by the private
shareholders
within thirty days from the date it is filed: Provided, still further,
That such shares of stock subscribed by the bank shall be preferred
shares
entitled to cumulative dividends at the yearly rate of one percent
during
the first five years, two percent during the following five years, and
three percent thereafter shall be preferred as against common and other
preferred stockholders in the distribution of assets in the event of
liquidation,
and shall be entitled to voting privileges: Provided, still further,
That
such preferred shares of the bank may at any time he paid off at not
less
than par and retired in whole or in part if, in the opinion of the
Monetary
Board, the bank has accumulated enough capital strength to permit
retirement
of such shares, or sold at not less than par to private individuals who
are citizens of the Philippines, and in the sale thereof, the qualified
registered stockholders shall have the right of pre-emption within one
year from the date of offer in proportion to their respective holdings,
but in the absence of such buyers, preference shall be given to
residents
of the province or city where the development bank is located:
Provided,
finally, That such preferred shares may be converted to common shares
when
sold to private individuals. All members of the board of directors of
the
private development bank shall be citizens of the Philippines:
Provided,
however, That no appointive or elective public official, whether
full-time
or part-time, shall at the same time serve as officer of any private
development
bank, except in cases where such service is incident to financial
assistance
provided by the government or a government-owned or controlled
corporation
to the bank: Provided, further, That in the case of merger or
consolidation
of private development banks duly approved by the Monetary Board, the
limitation
on the maximum number of corporate directors in a corporation, as
provided
for in Section 12 of the Corporation Code of the Philippines, shall not
be applied so that membership in the new board may include up to the
total
number of directors provided for in the respective articles of
incorporation
of the merging or consolidating private development banks."

Sec.
3. Section 5 of the same
Act is hereby further amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
5. At least seventy-five
per centum of the aggregate par value of the preferred shares of the
private
development bank held by the Development Bank of the Philippines shall
be invested in medium and long-term loans for economic development
purposes:
Provided, however, That the restrictions prescribed herein shall no
longer
apply if all the preferred shares held by the Development Bank of the
Philippines
have been retired or have been transferred to private shareholders."chanrobles virtual law library

Sec.
4. Sections 5-A and 7 of
the same Act are hereby repealed.chanrobles virtual law library

Sec.
5. Section 7-A of the same
Act is hereby renumbered as Section 7 and amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
7. Any private development
bank may invest in equities of such allied undertakings as may be
approved
by the Central Bank for banks of their category as provided in Section
6-A of Republic Act No. 337, as amended: Provided, however, That (1)
the
total investment in equities shall not exceed twenty-five percent (25%)
of the net worth of the private development bank; (2) the equity
investment
in any single enterprise shall be limited to fifteen percent (15%) of
the
net worth of the private development bank; (3) the total equity
investment
of the private development bank in any single enterprise shall remain a
minority holding in that enterprise except where the enterprise is a
non-financial
allied undertaking: and (4) the equity investment in other banks shall
be subject to the same provisions governing similar investments of
commercial
banks and shall be deducted from the investing bank's net worth for
purposes
of computing the prescribed ratio of net worth to risk assets:
Provided,
further, That equity investments shall not be permitted in non-related
activities: Provided, finally, That where the allied undertaking is a
wholly-
or majority-owned subsidiary of the development bank, the Central Bank
may subject it to examination."

Sec.
6. Section 10 of the same
Act is hereby amended to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
10. All private development
banks, with net assets not exceeding ten million pesos for Class C,
twenty
million pesos for Class B and thirty million for Class A banks
excluding
the counterpart capital subscribed and paid-in by the Development Bank
of the Philippines shall be totally exempt of all taxes, charges and
fees
of whatever nature and description except from compensating tax and
tariff
duties. For this purpose, the net assets of all private development
banks
shall be determined as at December thirty-one of each year and if such
are in excess of the limits prescribed by this section they shall be
liable
for payment of taxes for the following calendar year; said taxes to be
assessed, levied and collected in proportionate amount as the assets.
Private
development banks existing as of the date of effectivity January 1,
1985:
Provided, That exemption from local government taxes, charges and fees
shall cease on January 1, 1981: Provided, further, That private
development
banks to be established after the effectivity of this Act shall not be
entitled to exemption from such taxes, charges and fees."
chanrobles virtual law library

Sec.
7. The same Act is hereby
amended by adding a new section after Section 4-A, to read as follows:chanroblesvirtuallawlibrarychanrobles virtual law library

"Sec.
4-B.The authority of the Development
Bank of the Philippines to provide counterpart capital to private
development
banks under Republic Act No. 4093, as amended, and Republic Act No. 85,
as amended, is hereby terminated as of the effectivity of this Act:
Provided,
however, That this provision should not be construed as precluding the
Development Bank of the Philippines from purchasing shares of stock of
private development banks pursuant to Subsection B of Section 88 of
Republic
Act No. 265, as amended."
chanrobles virtual law library

Sec.
8. This Act shall take
effect upon its approval.chanrobles virtual law library